The book "Wisdom of Crowds" gives us readers many examples of how crowds are able to collectively make decisions that are in most cases equal to or better than decisions made by individuals or even small groups of professionals. Some internet sites have applied this method, crowd sourcing or in other words using the information provided by the large number of the sites subscribers, in their business model.
Upon further inspection of some of the provided site examples (wisia.us, marketocracy.com, and threadless.com) I believe that this business model is effective for the intended use that each site has. However, I feel as if this method is limited in its uses and that it would not be useful for all sites or situations. In the case of wisia - The Wisdom of Crowds, a question can be posed to the other users of the online community which will in turn be answered by those members in real time. For any site that uses polling as its main tool for answering questions crowd sourcing such as this is not only practical but necessary. For the site marketocracy, a number of sample investors recruited to the site, the crowd, and runs them through an algorithm that selects the top 100 and averages their investment results. This method of crowd sourcing doesn't at first glance seem like it would be effective. Comparing the sites numbers to those of the S&P 500 Index however, shows that this "m100" index does in fact consistently beat the market.
I have used sites with crowd sourcing in polls and also in forums where information can be exchanges through online communication. I would not as of yet trust crowd sourcing fully for more important decisions such as what to do with me money as marketocracy is concerned. One last example that I have encountered is one of the minimal functions in EBay, the ability of all users to rate individual buyers and sellers so others using the program will know which potential buyer/seller has a better chance of being trustworthy in payment or item quality respectively.
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I agree it is important for sites like ebay to have places for people to rate buyers and sellers. I also think it is important that when we are interested in buying certain products that there is a place for us to see what past buyers are saying about that product. Also, it is nice that some of these websites are letting us be the creative inventors of what we would like to see being produced.
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